Released: September 11, 2008

Mortgage rates plunge for those who qualify

Source: E. Scott Reckard, L.A.Times (Free Registration)

The government takeover of Fannie Mae and Freddie Mac has sent mortgage rates tumbling, prompting homeowners and would-be buyers to flood loan offices with phone calls.

But there’s a catch: Although the lower interest rates make it easier to get a mortgage, many lenders this week also raised the minimum down payment they’ll allow on a loan—making it impossible for some people to qualify for a mortgage.  And the decline in rates doesn’t apply to you if you’re borrowing more than $730,000.

But for the traditional 30-year fixed-rate mortgages that Fannie Mae and Freddie Mac acquire from lenders, interest rates have fallen to about 6% this week after hovering above 6.5% most of the summer, said data tracker HSH Associates.

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